I. Field of the Invention
The present invention relates generally to recovery audits, and in particular, to the determination of the possible scope of an audit as well as audit concepts.
II. Description of Related Art
Companies lose millions of dollars annually because of unpaid invoices, duplicate payment, discounts and allowances not received and general overpayments. While some of these mistakes are rectified by annual audits performed by a company's accounting firm, such audits are generally not thorough enough to identify all the recoverable loses due to erroneous business transactions. As a consequence, companies hire firms to provide recovery audit services directed at identifying overpayments and collecting the monies due their clients for such erroneous payments.
Recovery auditing involves the examining of financial, purchase, and other tracking records of client companies to identify mistakes in a transaction. If a mistake is found, then a claim is submitted to the vendor for the amount of the mistake. The claim results in a recovery of money for the client. The auditor is typically paid, at least in part, based on the amount of money they recover for their client. Because of the significant amount of data, variations among industries, and the multitude of potential claims, performing this auditing function is increasingly difficult and resource intensive.
Of particular interest is the desire to write as many claim types as possible based on the client data available for the audit. This enables the auditors to maximize their return on the audit and provides for greater recovery by the client. However, the task of correlating the client data to possible claim types can be a daunting task given the vast number of claim types and the variety of data elements received from a client, and therefore it is seldom that all possible claim types are identified. It also is the case that auditors often are not able to write certain types of claims because they are missing only a few data elements. In some cases these missing data elements could be made available to the auditor if the auditor had knowledge that having them would enable additional claim types to be written.
In addition, since different auditors miss different claims because of the subjective review they perform on the client data, the practice of quoting for a recovery audit is inconsistent from audit to audit. This may result in missed claims, and it may reduce the benefit of comparing audits for purposes of determining relative audit efficiencies since there was not a true reference point of possible claims.
Thus, there exists an unsatisfied need in the industry for an efficient means to correlate claim types to client data for use in the determination of the scope of audits or in the determination of client data to write certain claim types.